3 Phases of an Acquisition: A Rollercoaster Ride for Employees
Large ortho acquisitions can have a profound impact on employees, as the acquired people navigate through a range of emotions and uncertainties during the integration process.
This article will outline the typical phases experienced by employees in Company B, who are being acquired by Company A. While the journey may begin with excitement and optimism, it often takes a downturn, leading to demotions, relocation requests, and even job losses.
Many of you have experienced this ride already with Medtronic/Kyphon, Zimmer/Biomet, Stryker/MAKO, Stryker/K2M, ZB/LDR Spine, and many more will experience this ride with OrthoFix/SeaSpine and Globus Medical/NuVasive.
Phase 1: The Announcement – A Rosy Outlook
Suddenly a press release announces that Company A will be acquiring Company B, but doesn’t really say much.
Quickly, there is internal communication coming from above that says “This is going to be great. This gives us more synergies, more products, more people, and we will be stronger together.”
This is a lie. However, this lie is said with good intent because the combined companies cannot afford a panic. They cannot afford to risk a downturn in sales, disruption in business ops, or a mass exodus by employees yet. Status quo is a must at this point.
Upon hearing the initial news of the acquisition, employees in Company B may initially feel a sense of excitement and anticipation. The promise of synergies, expanded product offerings, and increased resources leads them to believe that they will be part of a stronger and more successful organization. The employees are filled with optimism about the potential benefits that the acquisition will bring, including growth opportunities and enhanced career prospects. Most people are fooled in Phase 1.
Phase 2: Uncertainty and Changes
After a few weeks, the internal communication tone changes to… “There will be some changes.”
As the acquisition process moves forward, uncertainty begins to creep in. Usually someone who is trusted in your company takes on the new leadership role. Employees start to notice subtle shifts in the workplace dynamics, organizational structure, and decision-making processes.
Communication channels become busier as leaders, finance wizards and HR teams provide updates on integration plans and the expected timeline. These changes can create a sense of unease and speculation among employees, leading to a decline in morale.
There are many secret offsite meetings and the internal communication becomes less clear and less frequent. Usually the first people affected are sales people or independent distributors who overlap in each region or city.
The strong employees will be the first ones to find a better role in another company and not wait for the reorg. The other employees will wait their destiny.
Phase 3: Reorganization and Downsizing
As the integration progresses, Company A starts aligning the operations and functions of Company B with its own. This often results in reorganization efforts and downsizing. Because of the large scope of the two organizations the downsizing is done in phases.
Employees may receive notices of demotion, relocation requests, or, in unfortunate cases, even layoffs. The optimism that once filled the air is replaced with anxiety, stress, and job insecurity. The workplace becomes a tense environment, as employees worry about their future within the new organization.
Many will hear, “You are fired! Here is your severance package” but in a nice way.
The journey of employees in Company B during an acquisition can be likened to a rollercoaster ride. Starting with excitement and hope, it gradually gives way to uncertainty and anxiety. Ultimately, the integration process may lead to demotions, requests to relocate, or even job losses. It is crucial for organizations to prioritize open communication, support, and transparency during such transitions, recognizing the emotional impact on employees and striving to minimize the negative consequences of the acquisition process.